Nestl Responsible Sourcing Audit - · PDF fileNestlé Responsible Sourcing Audit 5 Principles of responsible sourcing at Nestlé The Nestlé Supplier Code principles covers standards

1. Nestlé Responsible Sourcing Audit

2Nestlé Responsible Sourcing Audit

Background of the project

► Nestle has been implementing since 2006 HR and HSE corporate standards to improve the practices in all its sites worldwide. It is the CARE project

► It has been decided to extend this program to the supply chain, which is considered as an entire part of the whole process regarding HSE and HR.

► Nestlé is a member of the Sedex (Supplier Ethical Data Exchange), � a web based data system to share information on suppliers’ social and environmental

performance between suppliers and buyers and thus helps avoid multiple assessments and audits.

► Within Sedex, Nestlé is also part of a food manufacturer sub-group (Nestle, Cadbury, Danone, Diageo; Kraft, Unilever and Mars) called " AIM Progress" with a common objective to enhance responsible sourcing practices and sustainable production systems using a single HSE referential;


Background of the project

► Nestlé has decided to "show the path" and has designed this Res-source project to audit HSE & social level of compliance for their key suppliers (5000 targeted) and co manufacturers (2000 targeted) .

► This is a Nestlé own project , even if for transparency, Nestlé will use the Sedex database to register the audits report (see later in the ppt)


Principles of responsible sourcing at Nestlé

► The Nestlé Corporate Business Principles

stipulate values and principles to which Nestlé has committed worldwide.

« Key suppliers are audited in order to ensure that they comply with Nestlé’sprinciples or that they are working actively to achieve compliance. »

► The Nestlé Supplier Code

specifies and supports the implementation of non-negotiable minimum standards for suppliers, their employees, agents and subcontractors.

The Supplier Code is valid for all Nestlé suppliers and is available on www.nestle.com/suppliers


Principles of responsible sourcing at Nestlé

► The Nestlé Supplier Code principles covers standards r egarding :

� Business integrity : compliance with applicable laws and regulations, improperadvantage

� Sustainability

� Labour standard : prison and forced labour, child labour, working hours, compensation, non discrimination

� Safety and Health : workplace environment, product quality and safety

� Environment

� Supplying farmers

� Audit and termination of the supply agreement


Objectives of Nestlé Responsible Source Audits

► What does NESTLE want to achieve with the suppliers and C o-manufacturers audits ?

� know the risk when Nestlé works with a particular supplier/co-manufacturer

� stimulate improvement – get commitment to improvement

� ensure compliance with the Nestlé Supplier Code


Responsible Sourcing as improvement partnership

► NESTLE aims at working together with its suppliers to achieve good standards

engage suppliers

assesssuppliers

monitor suppliers

qualifysuppliers

trackingKPIsobjectives

gap analysiscorrective actions

supplier self assessment,3rd party audit

supplier development

1

2

3

4

External

3rd party audits

communicate Supplier Coderaise awareness

2. External suppliers assessment


Benefits of the external audits

► Auditing Bodies are independent third parties ensuring neutrality and credibility

► An international network ensuring both worldwide presence and knowledge of local language, culture and legislation, senior experienced in human resources, safety, health and environment

► Benchmark against other companies

► Only three are referenced by Nestlé in order to :

� ensure quality and homogeneity,

� and above all generate a learning curve to counter the limitation of audits (shows one moment in time)

► Bureau Veritas, worldwide certification and inspection body, already partner of Neslé through the Care project, has been selected as one of the third party assessor


Principles of the external audits

► External audits workflow

� Request for audits based on risk assessment (performed internally by Nestlé by région)

� Supplier commissions external auditors (from auditors pool)

� On site investigation of suppliers’ compliance

� List of gaps identified

� Corrective measures agreed

► Other principles :

� supplier bears the cost

� results can be shared with other customers via SEDEX:mutual recognition by various customers

► In case of Co-manufacturer (manufacturer of Nestlé branded products), the external auditors will be commissionned and paid by Nestlé purchaser.


Scope of the audit :

1. Nestlé Responsible Sourcing Audits are based on 4 pillars.

2. The Sites will be audited based on the Nestlé Audit Report, which contains 47 questions.

Safety & Health *

Environment *

Labour

CARE

Standardized Audit Methodology and Questionnaire

Business Integrity

* For manufacturing sites, the « Safety & Health » and « Environment » pillars are progressively evolving towards recognized international certification (OHSAS 18001 for Safety & Health and ISO 14001 for Environment )

• Suppliers assessment encompass :


Supplier Assessment Audit day(s) : Documents reviewLegal procedures,

safety and environment

records

Site TourCheck

working conditions

and environmenta

lpracticesClosing

meetingDiscuss each finding and

propose corrective action plan

Employeesreview

Individual and/or group

interviews

Opening meeting

Management interviews

Minor Gap: isolated and non-repetitive finding or minor issueMajor Gap : systematic and repetitive finding or major issueCritical Gap: exceptional issue, which requires informing the Compliance

Committee

3. Bureau Veritas


Bureau Veritas at a Glance

Marine 12%

Inspection & In-Service

Verification13%

Certification 12%

HSE10%

Industry14%

Government Services and International Trade 7%

Consumer Products13%

Construction19%

Asia Pacific & Middle East

24%

Europe23%

Americas16%

France32%

Africa 5%► Created in 1828

► A global leader in conformity assessment services in the areas of quality, health and safety, environment and social responsibility (QHSE)

� 2011 revenue: €3'359m

� 2011 adjusted operating profit: €544m

� More than 850 offices in 140 countries

► Over 52,000 skilled employees

► Eight global businesses providing a complete set of services

� Inspection, testing, audit, certification, risk management, outsourcing, consulting and training services

► Servicing 300,000 customers across a wide range of end markets

Broad Geographical Presence ( 2011)

Eight Global Businesses(2011)


Extensive Geographic Footprint

Asia & Middle East

� 190 offices, including 58 laboratories

� 10,500 staff

France


� 7,200 staff

Americas


� 5,700 staff

Europe (excl. France)


� 8,600 staff

Africa


� 1,000 staff

Global network comprising more than 850 locations a cross 140 countriesGlobal network comprising more than 850 locations a cross 140 countries


Bureau Veritas and Nestlé

► Bureau Veritas is a long-term and traditional partner of Nestlé,

► In 2008, Bureau Veritas delivered to Nestlé a value of 3.7 Millions € of services, all around the world, and covering services from inspection to certification

Mexico12%

Italy1%

France21%

Spain & Portugal4%

Andean pact1%Pacific

1%Asia3% Brazil

0,1%

Russia2%

UK6,6%

Benelux1,4%

Central Europe12%

USA4%

CPD22%

Middle East0,4%

Switzerland9%

Africa1%


Bureau Veritas and Nestlé

► Bureau Veritas is involved since the beginning in the CARE project since 2006 (Compliance Assessment of Human Resource, Safety & Health, Environment)

� CARE project supported through an external audit program the implementation of corporate standard rules related to HR & HSE, in all Nestlé sites around the world.

� Only 3 audited bodies, included Bureau Veritas, have been selected to deliver the audits,

► The actual Res.Source program extends these principles to the supply chain.

► Bureau Veritas is one of the auditing bodies selected to perform, worldwide, ISO 22000 quality supplier assessments involved since the beginning in the CARE project


Our references